First came the subprime mortgage crisis; now comes the cases of alleged fraud.
An amazing story Tuesday out of Southern California where the state attorney general has busted an alleged mortgage scam that may have bilked thousands of SOCAL homeowners out of millions of dollars.
And, California Attorney General Jerry Brown told me, in some cases, signatures of homeowners were actually forged on the mortgage documents!
How it worked
According to the attorney general’s office, at least six companies operated by one family enagaged in “predatory lending” by pushing the alleged victims into “illegal and unconscionable loans.”
Brown blames this scheme on the worsening mortgage crisis, which, he says, is creating a number of “fly-by-night” operations.
Brown told me he has never seen anything like this–and the man was even once governor of California, so he’s been around a bit.
The alleged victims were often targeted because they lacked command of English. They were promised one fixed rate on a mortagage but, later in the day, they would be visited by a representative of one of the companies who often had forms with incomplete information.
They would promise that, once signed, the proper numbers would be inserted back at the office, Brown says. If the homeowner declined, says Brown, in some cases their signatures were forged, often with improper spellings of their names.
Many lost homes
Brown says the scheme robbed many homeowners of their homes because they could not afford the paymens.
Arrests have been made and more may be still to come.
Growing California Mortgage Scandal?
Brown thinks so. His office says that in the coming weeks, “Brown intends to bring additional legal actions, both civil and criminal, against other mortgage lenders and foreclosure consultants who are taking advantage of homeowners across California.”
Doubt this is the only state this is happening in!
Let us know if you have heard of such practices in YOUR state or community.